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Accommodation Party |
Also found in: Financial, Encyclopedia, Wikipedia | 0.03 sec. |
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One who signs a Commercial Paper for the purpose of lending his or her name and credit to another party to the document—the accommodated party—to help that party obtain a loan or an extension of credit. A person wanting to obtain a car loan, for example, may offer a finance company a promissory note for the amount of the requested loan, promising to repay the amount over a number of years. If the company does not consider the person a good credit risk (one who will be able to repay the loan), it will request that someone else sign the note to ensure that the company will be repaid. Such a person may be an accommodation endorser, because he or she endorses the note after it has been completed, or an accommodation maker, because he or she must sign the note with the accommodation party. An accommodation party is liable to the person or business that extended credit to the accommodation party, but not to the accommodated party. The accommodation party is liable for the amount specified on the accommodation paper. If an accommodation party repays the debt, he or she can seek reimbursement from the accommodated party. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| ? Mentioned in | ? References in periodicals archive | |
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170 charitable contribution deductions and the use of
an exempt entity as an accommodation party in a transaction that will
shift tax benefits. * The accommodation party must hold legal title to the property
[during the transaction] and also hold other indicia of ownership that
are recognized under commercial law, such as a contract for deed. On the taxpayer's behalf, an accommodation party purchased
property intended to be replacement property for the park property. |
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